At the time when I went up to Balliol and sat down beside Mallet at the Freshmen's table in the Hall, wild and eager, shy and forthcoming, bursting with the desire to talk and to hear talk, and yet not exactly knowing how to approach my fellow-novices, I was an ardent, if theoretical, Republican and Socialist. I was, while only a schoolboy of fourteen or fifteen, a passionate admirer of Arch, the man who formed the first Agricultural Labourers' Union, and a regular reader of his penny weekly organ. It was the first paper to which I became an annual subscriber. Now, though I had noted some of the extravagances of the extremists, I was on the edge of conversion to full-blown Socialism or Communism. We did not much distinguish in those days between the two. I was especially anxious, as every young man must be, to see if I could not do something to help ameliorate the condition of working-men and to find a policy which would secure a better distribution of wealth and of the good things of the world.
Very soon, at once indeed, I confided my views to my new friend. Our conversation is imprinted upon my mind. Though, of course, I did not realise it at the time, it was destined to have a great effect upon my life. I told Mallet that I was so haunted by the miseries of the poor and the injustice of our social order that, however much I disliked it for other reasons, and however great the dangers, I was growing more and more into the belief that it would be my duty to espouse the cause of Socialism; then, be it remembered, preached by Mr. Hyndman in full and Mr. Henry George, the single-tax man, in an attenuated form. I was a Free Trader, of course, but if, as a result of the Free Trade system, the poor were getting poorer, and the rich richer, as, alas! it seemed, I was prepared to fight to the death even against Free Trade.
On this Mallet, instead of growing zealously angry with my ignorant enthusiasm, asked me very pertinently what right I had to suggest that the principles of Political Economy and Free Trade had been tested and had failed. He admitted that if to maintain them would prevent a better distribution of wealth, they must be abolished forthwith. He went on to agree also that if everything else had been exhausted, it would be right to try Socialism, provided one was not convinced that the remedy would prove worse than the disease. But he went on to explain to me, what I had never realised before, that the enlightened economists took no responsibility for the existing system. They held, instead, that the present ills of the world came, not from obeying but from disobeying the teachings of Political Economy. Everywhere Free Exchange was interfered with and violated, on some pretext or another. Even in England it would not be said that Free Exchange had been given a complete trial. It was, he went on to show, because they believed that the ills of human society could be cured, and only cured, by a proper understanding and a proper observance of the laws of economics that men like his father advocated Free Exchange so strongly and opposed every attempt to disestablish it.
[Illustration: J. St. Loe Strachey as an Oxford Fresman Ætat. 18]
We want as much as any Socialist to get rid of poverty, misery and destitution, and we believe we have got the true remedy, if only we were allowed to apply it. There would be plenty of the good things of the world for everybody, if we did not constantly interfere with production, and if we did not destroy capital, which would otherwise be competing for labour, not labour for it. By the madness of war and the preparation for war, we lay low that which prevents unemployment. We are always preventing instead of encouraging exchanges, the essential sources of wealth. Yet we wonder that we remain poor.
But the policy of Free Exchange, he went on, must not be regarded merely as a kind of alternative to Socialism. True believers in economics were bound to point out that the nostrum of the Socialists, though intended to do good, would do infinite harm if applied to the community. There was a possibility of release from the prison-house and its tortures by the way of Free Exchange, but none by the way of Socialism. That could only deepen and increase the darkness and bring even greater miseries upon mankind than those they endured at the present moment.
I listened greatly moved, and asked for more instruction. I soon realised that economics were a very different thing to what I had supposed. My father was a strong Free Trader and had talked to me on the subject, but without any great enthusiasm. He was an idealist, and in his youth had strong leanings, first to the Socialism of Owen, and then to the Christian Socialism of Maurice, Kingsley, and their friends. Though later he had dropped these views and had become a convinced supporter of Cobden and Bright in the controversy over the Factory Acts (and let me say that in this I still believe he was perfectly right), he had taken the Shaftesbury rather than the Manchester view. Right or wrong in principle, any proposal to protect women and children would have been sure to secure his support. He would rather be wrong with their advocates than right with a million of philosophers. Again, though he liked Bright, I don't think he ever quite forgave him for talking about the "residuum." My father had no sympathy with insult, even if it was deserved. With him, to suffer was to be worthy of help and comfort, and here, of course, he was right. Again, though he read his Mill, he was not deeply interested. He understood and assented to the main arguments, but he had never happened to get inspired by the idea that the way to accomplish his essential desire to improve the lot of the poor, and so to save society, was by discovering a true theory of applying the principles of Free Exchange. As Sir Louis Mallet used to say, a great deal of this misunderstanding came from the unfortunate fact that we called our policy Free Trade, and so narrowed it and made it appear sordid. If, like the French, we had called it Free Exchange, we should have made it universal and so inspiring.
Mallet's words, then, came to me like a revelation. I saw at once, as I have seen and felt ever since, that Political Economy, properly understood and properly applied, is not a dreary science, but one of the most fascinating and mentally stimulating of all forms of human knowledge. Above all, it is the one which gives real hope for making a better business of human life in the future than was ever known in the past; far better than anything the Communist theorisers can offer. Let their theories be examined, not with sentimental indulgence but in the scientific spirit, and they fade away like the dreams they are.
My teacher was as keen as myself. But when two young minds are striking on each other, the sparks fly. It was not long, then, before I believed myself to have mastered the essential principles of Free Exchange— principles simple in themselves, though not easy to state exactly. To apply them in a lazy and sophistically-minded world is still more difficult. Even business men and traders, who ought to know better, ignore the science on which their livelihood is wholly founded.
Thus, with a halo of friendship and intellectual freedom round me, I learned what Economics really meant, and what might be accomplished if men could only understand the nature of Exchange, and apply their knowledge to affairs.